Ben Akabueze, Director General of the Budget Office, says for Nigeria to have better infrastructure there must be an improved revenue, particularly from taxation.
Akabueze stated this at a virtual meeting hosted by the Telecommunications and Technology Sustainability Working Group in partnership with BusinessDay.
While responding to a question on the government’s plan to boost the country’s economy in post-COVID-19, he said, “We can’t have better infrastructure without improved government revenue. And we can’t have improved government revenue without levying taxes.”
Although expectations are high on the government to improve infrastructure, he said the case was that of the chicken and egg situation.
According to Akabueze, COVID-19 has not only reduced government revenue but also increased its cost of governance.
“It is a fact that covid-19 knocked off about 60 per cent from our oil revenue projections and as you know oil revenue is about 50 per cent of government revenue. So, if 60 per cent of that is knocked off then effectively you got 30 per cent of the total revenue knocked off,” he said.
Commenting on the issue of multiple taxations, Akabueze added, “In reality, Nigeria has one of the lower tax-to-GDP ratio, revenue-to-GDP, which is about six per cent compared to other countries in Africa.”
In this regard, comparing Nigeria with other Africa countries, he explained that it was either that other countries had fewer taxes “that are larger and we have a string of small taxes.”
“But it is not correct to say that the companies are more heavily taxed in Nigeria,” argued Akabueze.
Continuing, he stated, “When I hear someone say there are 39 taxes, I am alarmed. I have been listening for specifics what these taxes are and I hear very little in terms of specifics. I really want to know what constitutes 39 taxes.
“I think oftentimes people use the word taxes very loosely. For instance, right of way charge, I don’t consider a tax. That is a specific cost for a specific service.”
